CV Sciences Inc (CVSI)

[Gladys Thong]

The "Logic" of comparing Avg Sales

Comparing the CW POS to CVSI
I really like this one for starters.
True, most of the sales for CW are through On-Line.
I find this an interesting comparrison...

CW 7.3M retail sales / 11,000 stores = $663.63/qtr avg sales
CVSI 6.3M retail sales / 5,799 stores = $913.95/qtr avg sales

The "Sweet Lemon Logic" described above:

RetailSales / #Stores = AvgSales.

1. If #Stores increases but those are smaller stores, then

2. AvgSales will decrease because the denominator is increasing without a proportionate increase in the numerator.

3. Therefore it's good to have less #Stores even though that means less RetailSales because then AvgSales will look better when compared to competitors.

Q.E.D.

Any business advocating that "logic" is guaranteed a declining share in a competitive market.